Hospitals renovate facilities instead of building new ones

Hospitals and health systems are shifting their focus toward renovating old facilities, rather than building new ones, according to a survey conducted by Health Facilities Management.

In fact, renovation or expansion accounted for 73 percent of construction projects at hospitals, as they try to better serve patients without the high cost of new construction. About two-thirds of current renovation projects are worth less than $3 million, notes the magazine.

New hospitals and clinics under construction totaled almost $24.9 billion in the fourth quarter of 2010, down 10 percent from the previous year.

Instead, hospitals are updating infrastructure for greater use of information technology. One-third were in the process of replacing or upgrading their air handlers or ventilation systems; 26 percent were doing so to building services systems to handle the shift to electronic health records; and 20 percent were upgrading or planning to upgrade a data center.

The various provisions of health reform may also be driving hospitals to renovate or expand existing facilities. "Less money, more people, medical homes, rewards to reduce inpatient volumes, tighter capital markets, payments for specialties and upgrades will dramatically change the construction of new hospitals," Bradley Pollitt, vice president of facilities for Shands HealthCare in Gainesville, Fla., told Health Facilities Management. And the growing trend of industry consolidation may also lessen demand for new construction projects.

Although some hospitals saw a "slight uptick" in construction projects this year, roughly 25 percent of survey respondents expected 2011 would see fewer planned projects reach completion than in 2010, while 29 percent reported projects were on hold or delayed.

For more:
- read the survey findings
- here's the Health Facilities Management article

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